The AUDJPY monthly time frame suggests the price is in a long term uptrend and with the latest close rejecting support could the impulse phase be about to start?

Watch the video to learn more…

Monthly Chart

The monthly time frame on AUDJPY is bullish as it formed a higher high recently. The retracement phase could now be ending after the price retested the previous monthly swing highs. 

The monthly closed as a bullish pin candle showing the potential for the market to form a new bullish impulse phase. This should in theory create a new uptrend on the daily time frame. 

The downside risk to this market is the seasonal period and Covid 19. Seasonally the Australian Dollar usually underperforms which correlates with the stock markets falling through September. However, the market hasn’t really followed the seasonal trends lately so price may not follow it this month. 

Also, a recent delta variant breakout in Australia has cases climbing which could force the Government to act and form a national lockdown. If this happens we could see the market move lower against the trend. 

Trend Within Phases

The image above shows you what to expect when the market is in a bullish impulse phase on a monthly uptrend. As you can see the market on the daily time frame forms higher highs and higher lows offering multiple opportunities to trade the trend. 

When the market forms a retracement phase on a monthly uptrend we should see the daily time frame form lower lows and lower highs. This often gets overlooked by retail traders as they focus on the lower time frames.

Daily Time Frame

The daily time frame should form a higher low if the trend is going to change. The market currently hasn’t made a higher high so we need to look for a bullish reversal pattern. 

This pattern could be a double bottom pattern or an inverse head and shoulders. The more likely looking at current price would be an inverse head and shoulders pattern if the market retests the support level. 

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About The Author

Jonathan Kibbler

Jon Kibbler, our Senior Market Analyst, boasts over a decade of trading experience. He specializes in dissecting the intricacies of financial markets and sharing his expertise with precision. Jon’s insights have been featured at renowned events and platforms like Coindex, Forex Analytix, and Forex.com.

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